Smur­fit Kappa shares gain de­spite 9pc prof­its drop in lat­est quar­ter

Irish Independent - Business Week - - BUSINESSWEEK - Donal O’Dono­van

SHARES in Smur­fit Kappa were up 3.39pc yes­ter­day af­ter well re­ceived fi­nan­cial re­sults for the first nine months of the year.

Rev­enue was up 4pc to €2.1bn dur­ing the pe­riod, boosted by wider eco­nomic growth in core mar­kets in­clud­ing West­ern Eu­rope.

How­ever, higher in­put costs hit prof­its, which fell 9pc yearon-year to €170m in the three months to Septem­ber 30.

Cardboard box maker Smur­fit Kappa said that it would con­tinue to off­set cost pres­sures through fur­ther cor- ru­gated price re­cov­ery and ef­fi­cien­cies and left its full-year fore­casts un­changed.

Dur­ing the third quar­ter, Smur­fit Kappa ac­quired a cor­ru­gated plant out­side Moscow, its first in Rus­sia out­side St Peters­burg and mak­ing the busi­ness the largest in­ter­na­tional cor­ru­gated pack­ag­ing pro­ducer in the coun­try.

The Moscow site in­cludes ca­pac­ity to dou­ble the size of the new plant, CEO Tony Smur­fit told the Ir­ish In­de­pen­dent.

Smur­fit Kappa also agreed to buy a box busi­ness in Greece in the pe­riod, and is eye­ing fur­ther ac­qui­si­tions, in­clud­ing in the UK, he said.

The UK will re­main an im­por­tant mar­ket re­gard­less of Brexit, Mr Smur­fit said, but added that all busi­nesses, in­clud­ing his own, are look­ing for greater cer­tainty about fu­ture trade con­di­tions and want to avoid a so-called hard Brexit.

“Any­thing that hurts the abil­ity to trade is bad for busi­ness,” he said.

As well as ex­pand­ing by ge­og­ra­phy, the busi­ness is also push­ing into higher value ar­eas – in­clud­ing eS­mart, a pack­ag­ing ser­vices brand aimed at on­line re­tail­ers that pro­vides lo­gis­tics, pack­ag­ing and cus­tomer ex­pe­ri­ence.

The new ser­vice is al­ready avail­able to cus­tomers in all of the mar­kets where Smur­fit Kappa op­er­ates, Mr Smur­fit said.

CEO Tony Smur­fit

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